When Honda,a Japanese auto maker,built a factory in Ohio,
A)it was engaged in foreign direct investment.
B)it was engaged in portfolio investment.
C)it was engaged in a cross-border acquisition.
D)none of the options.

Question

Quizplus · Accepted Answer

Foreign direct investment involves the establishment of a physical presence by a foreign firm in another country, such as building or acquiring factories, as well as other types of long-term investment. In this case, Honda established a factory in Ohio, which is considered foreign direct investment because it involves the creation of a physical presence in another country. Portfolios investment refers to the investment in stocks and bonds, whereas cross-border acquisition involves the acquisition of an existing firm in another country. None of these options apply in this scenario except A.

When Honda,a Japanese Auto Maker,built a Factory in Ohio